Many young adults have expressed pessimism about their ability to build a financially sound framework as a result of the economy. With unemployment still high, student loan and credit card debt on the rise and the economy shaky, many individuals that belong to Generation Y say they fear they will not be able to pay down debt, save money for a home or move out of their parents' homes.
A new survey conducted by the Pew Research Center reveals nearly one in every three young adults has delayed life events, such as marriage or parenthood, as a result of the economy and nearly 50 percent of adults between 18 and 34 are working in professions they don't enjoy to make ends meet. In addition, In addition, young adults between 18 and 24 are experiencing record-low employment rates, which currently sits at 54 percent, U.S. News and World Report explains. Those who are employed are starting out at lower salaries than previous generations and experiencing more frequent and higher pay cuts.
"It's pretty clear that young people are facing a lot of things that our parents didn't – [including] student loan debt and very low job placement rates among recent grads. That's a pretty devastating combination," author Zac Bissonnette told the news source.
However, there are several actions young adults can take to improve their financial picture and build a solid foundation on a low income. Creating a budget is often the first step many credit counselors and financial professionals recommend to gain financial footing, and often the one tool that many young adults overlook. Creating a budget can help young adults manage their spending and allocate funds toward wealth-building accounts, such as savings and retirement. A budget allows young adults to create a debt management timeline for paying off high-interest credit card debt and choosing a student loan repayment program that best falls in line with their income and other financial obligations.
In addition to budgeting and carving out debt payments, young adults can also work with a professional to build their financial literacy. Understanding wealth-building strategies, the best way to pay down debt and tools and resources that can help them save money can influence a young adult's money management habits. For example, relying on coupons and discounts can help adults save on necessary expenses. Enrolling in payment programs, such as automatic debiting, may allow adults to earn an interest break on student loan payments. Learning these tools can lead to thousands in savings over the years and help adults work toward financial freedom.